PART IVTHE DISTRIBUTION OF THE NATIONAL DIVIDEND

Part IV, Chapter ITHE GENERAL PROBLEM OF DISHARMONY

IV.I.1

IN the two preceding Parts we have examined the way in which the size of the national dividend is affected by certain important groups of influences. It is not, of course, pretended that all the influences that are relevant have been brought under review. On the contrary, many of the more remote causae causarum, such as those that determine the general attitude of people toward work and saving, as well as many less remote causes that affect the development of mechanical inventions and improved methods of workshop management, have been deliberately left on one side. This deficiency I do not propose to remedy. There is, however, another deficiency, which cannot be thus lightly left unfilled. From the propositions laid down in Chapters VII. and VIII. of Part I. it follows that, while, in general and apart from special exceptions, anything that either increases the dividend without injuring the absolute share of the poor, or increases the absolute share of the poor without injuring the dividend,*1 must increase economic welfare, the effect upon economic welfare of anything that increases one of these quantities but diminishes the other is ambiguous. Plainly, when this kind of disharmony exists, the aggregate effect upon economic welfare, brought about by any cause responsible for it, can only be determined by balancing in detail the injury (or benefit) to the dividend as a whole against the benefit (or injury) to the real earnings of the poorer classes. No general solution of problems of that class is possible. It is important, therefore, to determine how far they are likely to arise in real life; to discover, in other words, whether causes acting discordantly upon the dividend as a whole and upon the absolute share of the poor are frequent or rare. When disharmonies are found, certain practical problems arising out of them will have to be examined.

End of Notes

The cuneiform inscription in the Liberty Fund logo is the earliest-known written appearance of the word "freedom" (amagi), or "liberty." It is taken from a clay document written about 2300 B.C. in the Sumerian city-state of Lagash.